While there is still plenty of uncertainty in regards to controlling the COVID-19 crisis, small and midsize businesses (SMBs) are finding a lot of reasons to be optimistic.
The amount of confidence that SMBs have in the economy has risen to levels not seen since before the pandemic, according to a new survey by Vistage Worldwide, Inc. a company that provides coaching to business leaders.
Specifically, economic confidence reached 88.0 on the company's Q4 2020 Vistage CEO Confidence Index, a quarterly survey of business owners, CEOs and corporate leaders. That is the highest the score has been since the fourth quarter of 2019, which could spell good news not just for employers, but also for those looking for a job.
Employers looking to increase hiring
The COVID-19 crisis led to a fair share of layoffs and furloughs in 2020, as companies struggled to adapt to regional shutdowns and decreased face-to-face interaction with customers. However, recent signs have emerged that indicate things may be turning around. For example, a survey taken last fall by staffing company The Adecco Group found that more than 6 in 10 companies planned to refill pandemic-related vacancies in the next six months.
Some companies appear to have even bigger plans when it comes to staffing. According to the Vistage Worldwide survey, in the fourth quarter of 2020, nearly two-thirds of CEOs — 64% — said they plan to expand their workforces in the next 12 months, which is up from 52% the previous quarter. On top of that, 59% of respondents expect the economy to improve in 2021, while only 15% believe it will worsen.
Company leaders are also expecting to make more money this year, a positive sign given the crisis has had a negative impact on the earnings of many businesses. In fact, 64% of respondents said their revenues decreased because of the pandemic. In the fourth quarter of 2020, however, 67% said they expect their revenues to increase in the next 12 months, and 55% expected their profits to rise in that period of time. In comparison, during the second quarter of 2020, only 45% expected revenues to increase over the next year and only 39% expected profits to go up during that time frame.
Lingering concerns remain
Despite the optimism of some SMBs, there are still concerns about how the next few months will play out.
More than 3 in 4 respondents — 76% — said they believe the economy has worsened compared to a year ago. CEOs are also acknowledging that recovery from the pandemic will not happen overnight. In fact, in the fourth quarter of 2020, 58% expected recovery to take six months or longer — up from 51% who believed it would take six months or longer in the second quarter of 2020.
Business leaders also recognize that they will have to continue making adjustments related to the crisis even as conditions improve. For example, more than 3 in 5 — 62% — said they are taking measures to address the safety of employees by sharing their expectations about employee behavior outside of the workplace. Employers will also have to deal with employee concerns, as workers adjust to new protocols in the post-pandemic workplace.
Methodology: Vistage Worldwide, Inc. surveyed 1,519 U.S. CEOs between Dec. 7-14, 2020.